KR Choksey is bullish on Petronet LNG has recommended buy rating on the stock with a target price of Rs 480 in its research report dated November 09, 2017.
KR Choksey's research report on Petronet LNG
Petronet LNG Ltd. (PLNG) reported profit of INR 5,888 Mn in Q2FY18 as compared to 4,376 Mn in Q1FY18. It was up 34.6% QoQ and 28.1% on YoY basis. The significant improvement was entirely driven by volume surprise which was 15% higher QoQ. Net profit was up QoQ on account of increase in both Dahej and Kochi volumes which have reported record volumes at 210 TBTU and 10 TBTU respectively.Outlook
We believe that a gradual ramp up of the domestic gas processed, expansion of the Dahej terminal and improvement in the Kochi terminal volumes post completion of the Kochi Mangalore pipeline will be the key triggers of the company in the coming quarters which help to significantly improve the top-line and profitability of the company. At a CMP of INR 261, the stock is trading at 6.80x of its FY19E earnings and at 6.94x of its FY20E earnings. We recommend a BUY rating with a target price of INR 480 (upside – 78.4%).
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